Service tax on hiring of vehicles

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Srimannarayana (Querist)
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01 March 2016 Dear Sir
We have received the Services of Hiring Vehicles from Indian Tourism Department. They charged Service Tax 5.6%(14%*40%) on bill. do we have to pay that 40%of 14% to Service Provider and remaining 60% of 14% has to pay Service Tax Department right?
here service provider and service receiver both are Government Organizations

Neljo Davis ACA

Neljo Davis ACA (Expert)
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04 March 2016 As per Sr. No. 9 of Notification No. 26/2012-ST dated 20-06-2012, abatement of 60% is available on Rent-A-Cab Service i.e. service of renting of any motor vehicle designed to carry passengers. It means service tax is payable on only 40% of the value of Rent-A-Cab service. Reverse charge mechanism is applicable for renting of motor vehicle designed to carry passengers.

Srimannarayana

Srimannarayana (Querist)
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07 March 2016 Thanks sir Thanking you

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